DEMAND for industrial space in the Philippines will continue to be positive in the second half of the year as more economic zones are set to be constructed, thereby attracting more investors into the country, according to a report released by a real estate consultancy firm.
Despite a decline in manufacturing output in April, the demand for industrial space in the country continues to increase, CBRE Philippines said in a report.
Manufacturing output grew at a slower pace of 1.4 percent in April compared to the 10.8 percent growth posted in the same period of last year.
CBRE said that the decline was partly reflective of the fragile global economy conditions, as negative export performance was also seen by most trade-oriented economies in East and Southeast Asia.
The Philippine Statistics Authority earlier reported that the manufacturing sector’s value of production dropped by 7.3 percent in May 2015, reversing the 11.4 percent growth posted last year.
Despite these negative manufacturing figures, CBRE said “investors remain confident of the growth prospects” of the country because a number of Japanese firms such as Toshiba Corp. and Seiko Epson Corp., are poised to relocate in the country.
It said international firms are looking at investing in the country’s industrial sector due to the large supply of skilled labor and to be able to maximize the Philippines’ duty-free benefits under the European Union’s Generalized Scheme of Preference Plus (GSP+).
The Philippines was granted GSP+ status by the EU in December last year, which will mean duty-free entry to the EU for some of the most important Philippine exports.
“The solid demand for industrial space will continue to bolster supply,” the report said.
It added that “infrastructure and investments will support the country’s economy amid the weak global activity and waning exports.”
But Jan Custodio, CBRE Philippines senior director for global research and consultancy, noted that there is a need to improve the industrial sector.
He said that the construction of infrastructure projects through the government’s Public-Private-Partnership (PPP) program is “key to the growth of the industrial sector”.
Projects so far awarded under the PPP program include the P65-billion Light Rail Transit 1 Cavite Extension project and the P17.5-billion Mactan Cebu International Airport Expansion project.
The report noted that the Philippine Economic Zone Authority (PEZA) expects the construction of more economic zones in the country to further attract more foreign investors into the country.
PEZA recently declared the Pueblo de Panay Technopark in Roxas City in Capiz as a Special Economic Zone, making it the first IT-BPM park in Northern Panay.